If a company's required minimum rate of return is 10%, and in using the net present value method, a project's net present value is zero, this indicates that the
A) project's rate of return exceeds 10%.
B) project's rate of return is less than the minimum rate required.
C) project earns a rate of return of 10%.
D) project earns a rate of return of 0%.

Question

Quizplus · Accepted Answer

A net present value of zero means the project's rate of return is exactly equal to the required minimum rate of return, which is 10% in this case.

If a Company's Required Minimum Rate of Return Is 10